MYTUTOR SUBJECT ANSWERS

789 views

What is Opportunity Cost?

Opportunity cost arises whereby you are forced to make a decision between two options, usually because of financial constraints. The 'opportunity cost' is the option that you do NOT choose.


For example, imagine that you are a delivery shop owner that has just been loaned £10,000 from the bank for improvements. You can either choose to buy a new delivery van for £6000 which will allow you to increase your amount of customers, or you can choose to buy a new low-fat fryer for £5000 which will improve quality (but you can't buy both).
If you choose the delivery van, then you concede the opportunity cost of improved quality as this is a missed opportunity that could have improved the business (hence it can be considered to have 'cost' you).

Jason E. A Level Business Studies tutor, GCSE Business Studies tutor,...

2 years ago

Answered by Jason, an A Level Business Studies tutor with MyTutor


Still stuck? Get one-to-one help from a personally interviewed subject specialist

8 SUBJECT SPECIALISTS

£20 /hr

Modupeola A.

Degree: Accounting and Finance (Bachelors) - Edinburgh University

Subjects offered:Business Studies, English Literature+ 4 more

Business Studies
English Literature
Economics
Accounting
-Personal Statements-

“I am a part-time tutor studying Accounting and Finance at the University of Edinburgh. I look forward to working with you to achieve your target grades. ”

£20 /hr

Matthew M.

Degree: MSci Computer Science (Masters) - Lancaster University

Subjects offered:Business Studies, Maths+ 3 more

Business Studies
Maths
Economics
Computing
-Personal Statements-

“About Matt: I'm Matt and I am a computer science student at Lancaster University. I have often been described as being friendly and hardworking by my friends, family and work colleagues. Prior to University I worked in the industry as...”

£20 /hr

Nathan B.

Degree: International Relations and Politics (Bachelors) - Sheffield University

Subjects offered:Business Studies, Maths+ 1 more

Business Studies
Maths
History

“My love for teaching and learning will shine through and ensure that every student achieves what they want to achieve!”

About the author

Jason E.

Currently unavailable: until 18/05/2015

Degree: Law (Bachelors) - Exeter University

Subjects offered:Business Studies, Maths+ 4 more

Business Studies
Maths
Law
English Literature
English Language

“Business Studies, Law and Maths tutor looking to help you succeed in your GCSEs and A Levels.”

MyTutor guarantee

You may also like...

Posts by Jason

How do you solve the following simultaneous equation?

What do you need to prove for Unlwaful Act Manslaughter (Constructive Manslaughter)?

What is Opportunity Cost?

Other A Level Business Studies questions

What are the causes of diseconomies of scale?

What is Factoring?

how many users are invoked in business meeting?

What are Porter's 5 forces and how they help the business?

View A Level Business Studies tutors

We use cookies to improve your site experience. By continuing to use this website, we'll assume that you're OK with this. Dismiss

mtw:mercury1:status:ok